REoptimizer® Blog

Be A Resourceful Tenant: Use Indices to Evaluate Rent Escalation

Posted by Don Catalano on Jul 19, 2013

With the exception of short-term commercial leases, nearly all other lease agreements contain a rent escalation clause. The concept is similar to the technique used in a lease for a “freestanding” commercial space occupied by a single tenant. The provision ensures that landlords receive a fixed return on the space as well as reimbursement for a number of capital costs and expense items, including insurance, taxes, maintenance and operations.

Continue Reading

A Tenant's Guide to Warehouse Leases

Posted by Don Catalano on Jul 17, 2013

Leasing a warehouse is very different from leasing other types of commercial real estate. While the lease terms may be similar, the way that you analyze the underlying real estate is different. There are more details to consider when choosing a warehouse. In addition, calculating your rent is more complicated since you have to think in a third dimension.

Continue Reading

How to Make Your Business Look Attractive When Negotiating a Lease

Posted by Don Catalano on Jul 15, 2013

 

Continue Reading

5 Ways a LEED Certification Can Benefit Your Commercial Real Estate

Posted by Don Catalano on Jul 12, 2013

LEED-certified commercial real estate isn't just good for the environment. It's also good for your company's bottom line. Whether you're looking to reduce your company's occupancy costs or to burnish its environmental bona fides, focusing on space that has achieved certification from the U.S. Green Building Council is a good way to do it. Along the way, you may also get happier and healthier employees. While LEED space has many benefits, here are the top five:

1. Lower Operating Costs

A green building conserves energy and reduces waste - two qualities that your CFO will love. When you're paying your own utilities and repairs through a triple net lease, the cost of operating your building can come close to your rent in some markets. Reducing electric consumption through the use of natural light while you reduce wintertime gas consumption through the use of high-efficiency HVAC equipment means less expensive utility bills. At the same time, LEED-certified commercial real estate buildings are frequently constructed with long-lasting components to reduce the building's overall contribution to the waste stream.

2. Public Perception

Choosing LEED-certified buildings sends a message about your company's commitment to the environment. A study conducted by Stanford back in 2008 established that over 61% of consumers feel that business should take a leading role in protecting the environment. With the growth of Generation Y, that statistic has likely increased. With this in mind, locating in LEED commercial real estate space can be a part of a marketing and branding campaign as well as being a strategic operational decision. With the U.S. Green Building Council making LEED standards for a range of different property types beyond office buildings, you can make your customer-facing spaces greener and gain a public image advantage over your competition.

3. Employee Health and Productivity

Many of your employees spend more of their waking hours working than doing anything else.  Their workplace has an outsized influence on their health. Commercial real estate with a LEED certification is healthier and more comfortable space to occupy, and can boost both health ratings and productivity. LEED spaces that use natural light instead of artificial light can reduce stress levels while making it easier to see and the work. LEED buildings also typically have higher indoor air quality, due to better ventilation and the use of materials that are less likely to outgas volatile organic compounds. This reduces both "building sickness" as well as the risk of having diseases travel between employees through the ventilation system.

4. Re-tenanting

If your company needs to vacate an LEED space, you'll find that it's easier to re-tenant. LEED commercial real estate property lease rates are as much as 20% above comparable non-LEED buildings. Furthermore, they also demand a significant rent premium that averages $11.33 per square foot per year relative to non-LEED buildings.

5. Recruiting and Retention

Attracting and keeping tenants from Generation Y is a significant challenge for many companies. This generation has been described as entitled, disloyal and unmotivated. However, they're also extremely tech savvy and well-educated. They're also interested in ethical concerns in business, including environmental sustainability. Having LEED-certified properties in your commercial real estate portfolio can give you a recruiting advantage over other companies, and retain workers of this fickle demographic. Given that 71% of Generation Y workers are concerned about ethical practice in business while just 56% are worried about a "cool" factor, finding LEED space may be more important than building high concept features.

Other great CRE LEED articles:

LEED Certified Buildings: The Savvy Tenant's Choice

4 Markets to Watch for LEED Certified Buildings in 2015


Subscribe Now Continue Reading

Key Metrics For A Lease vs. Purchase Decision

Posted by Don Catalano on Jul 10, 2013

Whether you have a law firm, dental office, retail store, nonprofit, manufacturing firm or art studio, there comes a point where every organization must weigh whether to lease or buy commercial space. The decision hinges on factors such as the type of business enterprise, available capital and the local commercial real estate market.

Continue Reading

5 Common Mistakes Made When Securing a Corporate Real Estate Mortgage

Posted by Don Catalano on Jul 08, 2013

Getting mortgages on your corporate real estate holdings is different from getting other types of business debt. The long term nature of most mortgages coupled with the fact that they cover two things at once - your business and your real estate - makes them require a different application and financing process than other types of business debt. With this in mind, companies, both large and small, frequently make the same mistakes when they go out to the financing markets. Here are five that you can avoid:

Continue Reading

Everything You Need to Know About Subleasing Your Space

Posted by Don Catalano on Jul 05, 2013

Nothing can damage the financial performance of your corporate real estate portfolio more than unused and unnecessary space. Whether you're looking at a too-big space that needs right-sizing, or carrying leases on locations that you've vacated, mitigating your losses by finding a subtenant should be a top priority for you. With a little bit of effort, you can usually cut, if not eliminate, your rental expenditures.

Continue Reading

3 Ways to Find Out if You're Over Market on Your Corporate Real Estate

Posted by Don Catalano on Jul 03, 2013

While you might not be able to change your leases until they are due to roll over, having a good sense of which of your leases are reasonably priced and which are unfavorable can help you build a long term corporate real estate strategy. When you know which sites are overpriced, you can start preparing to either renegotiate them, move them or even shut them down. Depending on how much exposure you want to get in the market and how much information you want to collect, there are three ways that you can go about researching market rent levels for the leases in your corporate real estate portfolio.

Continue Reading